Government to privatise ACC work account

23 October, 2009

The National-led Government has signed a deal with the ACT Party to privatise the ACC work account, effectively handing workplace accident cover over to the private insurance industry.

The announcement follows a systematic campaign by the government to portray ACC's accounts as being in a state of crisis, despite the scheme making a billion dollar surplus in the last financial year and receiving a glowing report from PricewaterhouseCoopers.

The EPMU hit out at the privatisation of the work account, calling it a cynical move that will transfer up to $200 million a year from workers to the Australian insurance industry.

Andrew Little says privatising the work account will mean higher levies and reduced coverage as working New Zealanders are forced to cover the profits of private insurers.

"The Government has been utterly cynical about ACC right from the outset when the ACC Minister Nick Smith tried to manufacture a crisis by misleading New Zealanders about the financial implications of full funding.

"This deal with ACT confirms just how cynical this whole process has been. Either they planned to privatise the work account all along, or they're allowing a party with 3% of the vote to dictate the ACC coverage of 2.4 million working New Zealanders."

The Government has appointed a ‘steering group' to oversee the policy, which may be extended to privatise the rest of ACC, including the motor vehicle account.

Andrew Little is critical that the group doesn't contain a single worker representative and appears to be stacked towards privatisation from the outset.

"Privatisation is not going to reduce levies for workers and businesses. Private insurance companies will need to make a profit from somewhere and this can only come through higher levies or denied compensation.

"The only winners from privatisation will be the Australian insurance companies. In fact, a report released by Merrill Lynch before the election shows the insurance industry stands to profit by up to $200 million a year.

"This is a purely political decision and it is workers who will pay the price. The EPMU has no choice but to work with the Council of Trade Unions and allied groups to mount a campaign to knock it back."